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Category Archives: Governmental Regulation

It’s been nearly six months since the voters approved Question 4 to legalize and tax recreational marijuana. But we’re still at the starting line, because in December the Legislature pushed back by six months all the timelines that the ballot question had established. The regulatory commission that was supposed to be appointed by March won’t be appointed until September, the review of license applications that was supposed to begin in October won’t start until next April, and so on.

And now it’s possible that the finish line may be moved. There’s a brand new legislative committee that will review the 44 bills that were filed at the start of the new 2017-2018 session responding to the passage of the new law. With only a few exceptions, the bills are far more wary than enthusiastic. They propose stricter local control over retail marijuana establishments, a reduction in the amount of marijuana that can be grown at home, restrictions on potency (the law, as approved by the voters, provided that such restrictions would be imposed by the regulatory commission), restrictions on advertising, etc., etc.

Which is at least a little odd considering that the Department of Revenue has estimated that marijuana sales could bring in $64 million in new revenue in the first year of the law’s operation, and once again this year the state is digging through the sofa cushions for loose change to fix the perennial hole in the budget.

But before we conclude that our lawmakers are skittish about any new enterprise that may strike some members of the citizenry as morally problematic even as it brings in new revenue, let’s review the launch of the casino law.

At a comparable time (six months after the law was passed), the members of the new Massachusetts Gaming Commission had been appointed and staked to a $15 million line of credit. The buzz was all about the new jobs that were shortly to arrive and the new revenues that were shortly to replenish our recession-depleted treasury. (The marijuana law has gotten only a measly $300,000 to cover costs to date.)

The Gaming Commission got the licensing process underway with an award to Penn National Gaming to operate a slots parlor in Plainville. They did so with the rosy understanding that it would bring in as much as $300 million in revenue annually. But whoops. After the first year of operation, the revenue number was $160 million, barely half of the original estimate. What happened?

According to the Commission’s account, which the Globe reported credulously, the initial revenue projections were “extravagant” guesses offered by casino industry consultants. Well, okay, but what about the Commission’s due diligence in investigating that guesstimate? “We thought there was a flaw in their methodology but we couldn’t find it,” Crosby said.

Indeed. The Commission could not find the flaw, even when aided by the research of their own consultants, who also predicted that Plainville’s annual revenues would yield far more than $160 million — and who were rewarded by the state for such prognostications to the tune of a million bucks.

Water under the bridge, apparently. Anyway, now all is well. The Commission “could not be more pleased” with the Plainridge revenues, which are half of the original estimates and which is totally okay, because we now know the estimates were unrealistic to begin with. Construction has begun on two other casinos, with who knows how many more to follow, as Massachusetts duels Connecticut for supremacy in the gambling wars. Gambling is clearly the Legislature’s favored child, (as compared to marijuana), and even more cossetting may be on the way — the House of Representatives is proposing to let casinos continue to serve alcohol for hours after bars and restaurants must close. Meanwhile, marijuana legalization is in danger of being strangled in its crib.

Did the Legislature ever take note of the discrepancy between revenue expectations and revenue reality in Plainville? No evidence that they did, and if it’s brought to their attention, many seem prepared to laugh it off like Commissioner Crosby did: “we all seemed to be smoking something.”

These days, when Congress is not immediately occupied with demolishing the Affordable Care Act, it’s been gleefully taking a sledge hammer to various regulations that were put out during the last six months of the Obama administration. In February, for example, Congress freed coal companies from the regulatory burden of having to find some place other than streams to dump their toxic mining waste. And as soon as the President signs legislation that was passed two days ago, shooting grizzly bears from airplanes will again be permissible.

The law that allows Congress to invalidate regulations is called the Congressional Review Act. It was passed 20 years ago (when Newt Gingrich roamed the Capitol – surprise!) and was used only one time before the current session of Congress. Only simple majority votes in the House and Senate and the signature of the president are needed to invalidate any regulation put into place after June 13, 2016. The law also provides that the executive branch agency that put the regulations forward in the first place may not impose “substantially similar regulations” without express Congressional approval.

Which brings us to another recent instance in which Congress voted to rescind an Obama policy, reported on first by Politico. This case involves a labor department regulation concerning the drug testing of people claiming unemployment insurance benefits.

Back in 2012, when the national unemployment rate was just beginning to recover from a recession-era high of 10.2 percent, Democrats and Republicans in Congress agreed on compromise legislation that extended unemployment insurance benefits but also allowed states to drug test claimants for UI who were applying for jobs in certain industries. (Because anybody who needed UI benefits at a time when job seekers vastly outnumbered job openings must of course be on drugs, and who even cares if drug testing in public benefits programs is a total waste of taxpayer money?) The legislation directed the Department of Labor to put out regulations to implement the drug testing provision. Last August, the Department issued final regulations that allowed drug testing of UI claimants for jobs in commercial trucking, air traffic control and other similar jobs involving public safety. The GOP, very disappointed that more jobs were not covered by the regulation, used the Congressional Review Act to pass legislation rescinding it. That bill is now headed to the president’s desk.

But here’s the rub: if the president signs the legislation, then the Trump administration’s Department of Labor cannot put out any new regulation that is “substantially similar” to the one that was rescinded. And any regulation governing drug testing of UI claimants would be “substantially similar” by definition.

What to do? If the president signs the legislation, the GOP can try to pass new legislation expressly permitting the Department of Labor to revisit the issue. However, the Senate vote to rescind the Obama-era regulation passed only narrowly (51-48), which likely means the GOP would need to deal with the threat of a filibuster. In the meantime, assuming the legislation becomes law, states with drug testing programs will be entirely without guidance about how to proceed without risking legal challenges. Governor Scott Walker, whose state has pioneered these drug testing programs, is probably not happy.

Wonder if Speaker Ryan know of the conundrum when he tweeted this?

Another one heads to President Trump’s desk. This legislation allows states to have drug testing to receive federal unemployment benefits. pic.twitter.com/cFnvdeQqX1

A series of articles by Kay Lazar in the Globe has brought us the unsavory story of Synergy Health Centers, a New Jersey company that arrived in Massachusetts three years ago and now operates 11 nursing homes here. The Globe details the dangerously substandard care that Synergy is providing to the residents of these nursing homes (medication errors, insufficient training, short staffing, a scabies outbreak, the death of a patient who was dropped while being transferred by mechanical lift to a wheelchair). Meanwhile, Synergy’s officers are making seven-figure salaries.

The Synergy stories also reveal the laxity of our nursing home licensing process. The health department’s investigation of Synergy failed to uncover, to take just one example, the arrest of one of Synergy’s owners for 1400 code violations and unpaid fines in a New Jersey apartment complex he once owned.

Nursing home safety in general and Synergy’s track record in particular came to the Legislature’s attention a while back, and it responded by directing the health department to establish regulations to ensure that a hearing with opportunity for public comment be conducted before any nursing home could be closed or sold.

And thereby hangs a tale of wrangling between the Legislature and the Baker administration, BFF’s on most issues, over the latter’s reluctance to exercise its regulatory power.

To be fair to Governor Baker, the Legislature’s directive to the health department to provide for public hearings happened in mid-2014, and the Patrick administration failed to act on it during its last six months. But after Governor Baker took office in 2015, the foot-dragging continued. One of the Governor’s first initiatives was a “regulatory pause” — a prohibition on any new agency regulations in order to start relieving the Commonwealth’s “job creators” (his term) from excessively burdensome oversight. The regulatory pause soon lengthened into a regulatory moratorium by way of an Executive Order requiring agencies to take a year to review every regulation and to discard those that “unduly and adversely affect Massachusetts citizens and customers of the Commonwealth.” Government regulations, the Governor often says (during his most Pioneer-and Cato-Institute moments), are like the junk that accumulates in your basement and which, in the interests of good housekeeping, you need to clean out every so often.

By May 2015, five months into Baker’s term, there were still no nursing home licensing regulations and no timetable for their arrival. To be sure, the press of other business — like the opioid crisis — was keeping the health department busy. And the ranks of health department staff were about to be thinned through the early retirement incentive program that the Governor and Legislature had agreed on as a cost-savings move. Yet even taking those problems into account, it was difficult to avoid the conclusion that protecting Synergy Health Centers from meddlesome governmental regulators was more important to the Baker administration than protecting elderly and disabled nursing home residents from Synergy Health Centers. Governor Fix-It may have been attending to a lot of problems, but on the issue of nursing home safety, it might be said, he was downstairs cleaning out the basement.

Therefore, frustrated by the lack of progress on nursing home licensing and concerned that the Governor’s blinkered view of regulations extended beyond just the issue of nursing home licensing, the Legislature decided to require agencies to maintain a log of the statutes passed in the previous 24 months for which regulations were required and for which regulations had not yet been adopted. Also, agencies were directed to make this information available on their websites.

The Governor’s response to this mandate? Veto — on the ground that the requirement would unnecessarily burden state agencies. Yet at the same time, as the Globe noted, the Governor’s health department was unable to find any reason to deny Synergy another nursing home license, its 11th, even after many more reports of reports had become public that a Synergy-owned nursing home mistakenly put ear drops into a patient’s eye and then did not call a doctor until the patient had suffered for five hours.

And the Legislature’s response to the Governor’s veto? Override — along strict party lines.

So where are we now?

There are no signs yet that agencies are complying with the requirement to post the regulations they’ve been directed to adopt, even though that’s been the law for several months now.

In January the health department finally produced the long-sought nursing home licensing regulations, 18 months after the Legislature requested them. The department also acknowledges having received more than 11,000 complaints related to nursing homes during the past year alone. It’s planning to launch a program of surprise inspections to curb abuses at problem facilities. The Governor has proposed hiring two more nursing home inspectors for this effort. (There are 414 nursing homes in Massachusetts.)

The regulatory review and basement-purging that the Governor ordered a year ago is due at the end of March. For the sake of nursing home residents, one hopes that agency staff will then be free to attend to other matters and that the moratorium on new regulations will be lifted when it’s appropriate to do so.

The Massachusetts Gaming Commission, in a unanimous decision by the judges.

State and municipal agencies are prone to resisting public records requests (sometimes for reasons that may be understandable — like a lack of resources — but are nonetheless insufficient). We’ve seen their trailblazing efforts at evasion in such areas as dilatory response tactics, exaggeration of the costs of compliance, and the fearless use of redaction.

Meanwhile, the Gaming Commission truly has been thinking outside the box. Rather than evading the law by withholding records that are in its possession (shutting off the outflow pipe), the Commission has pioneered a new approach: evading the law by declining to accept records in the first place (shutting off the inflow pipe).

Here’s what won the award for the Gaming Commission:

By statute, casinos have to file reports with the Commission about the complimentary services — “comps” in the trade lingo — that they provide. Comps are things like a free drink, a free meal, a free room — whatever will keep the gambler on the premises. In one famous case, a very wealthy casino patron was treated to comps in the form of private jet flights to Las Vegas, which contributed to her betting a billion dollars at casinos and racking up thirteen million dollars in gambling losses.

Information about comps is certainly not something the casinos favor disclosing, and they sought relief from this filing requirement. The Gaming Commission, agreeing with the casinos, recommended to the Legislature that it eliminate the requirement, but the Legislature failed to act. So the Gaming Commission stepped in to take care of the problem. They used their regulatory power to excuse the casinos from having to file the reports, while continuing to require that the casinos maintain them and provide them to the Commission upon request. Since the Commission has already stated that it “cannot envision a compelling use for this data,” don’t expect a request for the records anytime soon.

So the Gaming Commission has no records, for example, of the comps from the Plainville casino, which opened last year. If they did have them, those records would be subject to the public records law and we could have them too. But no. Not so far anyway.

It’s certainly possible to argue that the statute requiring that casinos “shall submit” reports to the Commission doesn’t give the Commission leeway to decline them. That the statute would result in the records being available under the public records law while the Commission’s regulation results in their being unavailable seems relevant to this whole analysis. The right plaintiff could make things interesting.

(An earlier version of this post cited a source that misstated the amount of gambling losses accrued by the wealthy casino patron. Error, which author regrets, has been fixed.)

[Update: March 7, 2016: The Joint Committee on the Environment, Natural Resources and Agriculture has given this bill a favorable report. There are 115 days left in the Legislative session for the bill to make it to the Governor’s desk.]

Original post: January 10, 2015.

A question for our Legislature, whose leaders reportedly are looking to get more done this year than last: to enact or not to enact the GMO labeling bill?

It would be hard to find a bill with more legislative support: 155 of our 200 lawmakers are sponsors. Think of all those happy press releases. Plus the support is bipartisan — in fact, a supermajority of the state GOP delegation is on board. The long sponsor list reflects the fact that 93 percent of Americans agree that genetically modified food ought to be labeled as such.

Opponents of labeling, including agribusiness giants like Monsanto, say over and over again that there’s no difference between genetically modified food and conventional food and imply that anybody who wants GMO labeling is a Luddite cousin of the anti-vaccination folks, the climate change deniers and the creationists. And it’s true that those who favor GMO labelling lack hard evidence that GMO’s present a unique health risk. Slate columnist and labeling opponent William Saletan has called GMO labeling an ill-advised fixation that “only pretends to inform you” with useful knowledge.

But in last year’s encyclical on our responsibility to take care of God’s creation, Pope Francis offered a broader perspective on this issue that included a distinction between GMO science and GMO business. “Although no conclusive proof exists that GM cereals may be harmful to human beings, and in some regions their use has…helped to resolve problems, there remain a number of significant difficulties which should not be underestimated.” The science of GMO’s may be benign, Francis wrote, but the business of GMO’s as presently conducted destroys ecosystems, reduces plant diversity, and concentrates productive land in the hands of a few wealthy oligopolies.

A recent article in the New England Journal of Medicinemade a similar point: whether or not GMO’s by themselves present health risks, they are the corollary in our agricultural system of a very copious use of herbicides. Monsanto sells “Roundup Ready” seeds that have been genetically modified to be resistant to herbicides. Monsanto also sells “Roundup,” its brand of the herbicide glyphosate that can be applied as liberally as needed because the seeds are have been genetically engineered to withstand it. Weeds offer no competition and crop yields go up.

Because we now have crops that have been genetically modified to resist glyphosate, we now dump 250 times as much of it on our amber waves of grain as we did 20 years ago. Maybe the crops won’t hurt you but what about the herbicides? And despite Monsanto’s insistence that glyphosate is safe, the International Agency for Research on Cancer determined last year that it is a “probable human carcinogen.” Also, not at all surprisingly, resourceful weeds that are resistant to glyphosate are emerging that will require agribusiness to up its herbicide ante.

Another argument that agribusiness often makes against GMO labeling is that any regulation of this agricultural practice should happen at the federal level, so that there can be one uniform standard, and we can reduce costs to industry and eliminate confusion for consumers. Well, a loud amen on that one. Let’s ask the folks who have been calling for the reinstatement of the federal assault weapons ban what they think our odds are. The only work that Congress has put into GMO regulation has been to try, at the behest of agribusiness, to keep states from regulating it themselves.

Which brings us to Vermont, where a 2014 law requiring the labeling of genetically modified food will take effect this July, unless Congress intervenes or unless the Federal Court of Appeals for the Second Circuit rules otherwise. The Grocery Manufacturers Association, having been unsuccessful so far in its effort to persuade Congress to outlaw regulation by the states, has sued Vermont, contending that the labeling law burdens their First Amendment right to free speech. The Grocery Manufacturers lost in District Court and a panel of the Second Circuit has heard their appeal. Eight states, including Massachusetts, filed an amicus brief in support of Vermont’s GMO law. Two of those eight states, Connecticut and Maine, have passed GMO labeling laws, but those laws will take effect only when several other contiguous states do the same.

So here we are in Massachusetts. GMO labeling may not be the perfect proxy for what we ought to do to protect our food supply, but even GMO labeling opponents agree that the runaway use of herbicides is one big problem we would have less of without the existence of GMO seeds, and labeling advocates offer many more. We’re next door to Connecticut and almost next door to Maine, and they’re watching. If we pass the GMO labeling bill, we’re joining with our New England neighbors. If we don’t, we’re making Monsanto happy.

Amazon is coming to Fall River. The on-line giant announced yesterday that it will occupy a million-square-foot building that’s going to be built on the Fall River-Freetown line. The new warehouse, which in Amazon-speak carries the name “Fulfillment Center,” will join 50 or so similar facilities around the country.

So who among us can look forward to being fulfilled by the Fulfillment Center?

For starters, Amazon customers in Massachusetts, who can look forward to next-day delivery of their $600 premium foosball table with enamel screen-printed graphics or their Natura Bisse Oxygen Cream (immediately softens the most dehydrated skin, $88 for a 2.5 ounce jar).

Second, Amazon itself, which in addition to its profits gets more than $6 million in state and local tax breaks for choosing the Fall River site.

Third, Governor Charlie Baker, who’s pretty excited about it all (as is the predominantly Democratic Fall River area legislative delegation).

Anybody out there who’s not going to be so fulfilled?

Well, construction companies in Massachusetts, which lost out on the building contract. That went instead to a company from East Rutherford, N.J.

And the people who will be working in the new Fulfillment Center? Amazon is promising 500 full-time jobs at an average salary of $35,000. Which might well sound good to people in Fall River right now, where the unemployment rate remains stubbornly high. But that average salary will still leave a Fall River family of four about $25,000 short of what they need to live on (and 500 jobs is only half the number of jobs Amazon was promising Fall River a year ago).

Then there’s the issue of the working conditions at Amazon’s Fulfillment Centers. The Allentown, Pennsylvania, Morning Call newspaper has been covering the working conditions at Amazon’s nearby Lehigh Valley Fulfillment Center for the past five years. Anybody contemplating an Amazon job in Fall River and anybody who is unequivocally keen on Amazon’s arrival in the state might want to take a look at the Morning Call‘s stories about life in an Amazon warehouse: punishing productivity quotas that result in the firing of workers unable to meet them and injuries to many who try (keep in mind that workers must cover a warehouse that’s the size of 21 football fields); a management structure in which the real employer is not Amazon itself, but a temporary help agency called “Integrity Staffing Solutions,” which can take advantage of laws that limit its liability for unemployment insurance and can help reduce the risk of encroachment by labor unions through constant employee turnover; triple-digit temperatures in the warehouse during the summer (on this point, Amazon was at pains to say that it had arranged for paramedics to be in ambulances parked outside the warehouse to treat the severely dehydrated).

If you take another look at Governor Baker’s enthusiastic comments about Amazon’s arrival, you’ll notice that he’s very excited to help Amazon meet all its needs — and that the Massachusetts residents who will be working there are a mere afterthought:

“Our collaboration and partnership with Amazon is a good example of where the state has worked with, and will continue to work with, companies and help them meet their needs for everything from tax incentives to training new employees to permitting so that they can continue to grow in the Commonwealth.”

Update, September 30: This afternoon, the House adopted the amendment I wrote about in this post. On to the Senate.

Anybody who shares any remotely credible explanation of why I’m wrong and how it is that this bill would make only minor and benign tweaks will be thanked with a copy of The Scarlet Letter.

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An amendment to the supplemental budget that’s up for debate in the House tomorrow would broaden a 10-year old law that allows landlords to bill tenants for their water usage under some circumstances.

The current law lets landlords who have installed water-conserving fixtures in their rental units and have also installed water submeters that accurately measure water usage to the tenants’ apartments to charge tenants for water once they have certified to the local board of health (under the penalties of perjury) that they have complied with these requirements.

The amendment, filed by Representative Angelo Puppolo (D-Wilbraham), would appear to apply to situations in which the rental property has been sold to new owners since the time that the former owners certified that they were in compliance with the law’s requirements but the certification cannot be located.

One might think that an appropriate solution in these cases (which should be few in number since the local boards of health have records of the certifications) would be for the new owners to provide proof that their properties are equipped with water-conserving fixtures and water submeters.

But instead, the new owners need only file a new “form” to the effect that their rental units are in compliance with the law. The form, which need not even be submitted under the penalties of perjury, concerns almost by definition a topic about which the new owners are confessing their lack of direct knowledge — they weren’t involved.

The House tried to get the Senate to agree to this change during the conference committee negotiations on the main budget in June, but the Senate said no. If the change goes through this time, expect that suddenly lots of tenants will be obligated for water charges on top of their rent.